CFR experts give their take on the cutting-edge issues emerging in Asia today.

Hyundai-Kia Chairman Mong-Koo Chung speaks at the ceremonial groundbreaking of the 1.2 billion dollar KIA auto plant before it began construction in West Point, Georgia October 20, 2006 (Tami Chappel/Courtesy Reuters).

Negotiations on the Korea-U.S. Free Trade Agreement (KORUS-FTA) began in 2005 and the agreement was completed minutes prior to the expiration of Trade Promotion Authority (TPA) under President Bush in 2007. The Obama administration won significant revisions that addressed potential weaknesses in the agreement in December of 2010, but it—and other FTAs with Panama and Columbia—still have not been formally submitted to Congress for ratification. The reasons for the protracted delays are well articulated in the findings of CFR’s Independent Task Force on Trade and Investment Policy released earlier this week. Namely, in the absence of the sort of coherent and bipartisan approach to trade policy that the report elaborates, Congressional consideration of the Korea-U.S. FTA has suffered from unconscionable delays.

South Korea has shown unusual patience in pursuit of U.S. ratification of the deal. South Korea’s President Lee Myung-Bak has consistently pushed the KORUS-FTA since his first meeting with President Obama in 2009, only to find the United States preoccupied with issues from health care to the debt ceiling. Meanwhile, the Korea-EU FTA, which was originally negotiated with the Korea-U.S. FTA as a template, entered into force on July 1 of this year. Thus, EU firms are enjoying tariff advantages in the Korean market unavailable to U.S. firms in the absence of KORUS ratification. Although South Korea’s ruling party controls the National Assembly, the delays carry potential political risks for South Korean legislative ratification (to be taken up following U.S. Congressional ratification) as the National Assembly comes closer to legislative elections in April of 2012.

In recent weeks, leading members of the Puea Thai government have made it clear that, in terms of Thaksin Shinawatra returning to Thailand, the question is not if but when. The Nation reported last week that Deputy Prime Minister Yongyuth Wichaidit called the former Prime Minister’s return “overdue” — though he would not elaborate on how Thaksin would come back to the country, given that he is still wanted on criminal charges there. A blanket amnesty would be one way for the government to get Thaksin back. A recent reshuffle in the government, including in the Corrections Department, may be designed to smooth the way for either an amnesty or some kind of return in which Thaksin would not serve jail time.

Several factors are pushing for Thaksin’s return. Though he publicly denies it, Thaksin himself clearly wants to return and to play a role in Thai politics from inside the country. He seems unable to contain himself from traveling around Asia and upstaging his sister Yingluck’s government, showing that he still has a great desire to play a political role. He also surely wants to recover more of his assets taken following earlier court rulings. But the desire for return does not just stem from Thaksin, though some Democrat Party supporters believe that. Among the core of Puea Thai and red shirt supporters, many ardently want Thaksin to return home. To survive, Prime Minister Yingluck certainly needs to please those core supporters, who were critical not only to Puea Thai’s electoral success in July but are also at the heart of those programs that deliver the party’s message to grassroots, that run community radio stations, and that promote Yingluck on her trips outside Bangkok.

Cashiers are seen behind piles of kyat banknotes as they count it in a private bank in Yangon July 21, 2011 (Soe Zeya Tun/Courtesy Reuters).

A recent report in The Diplomat suggested that Burma received some $20 billion in foreign direct investment last year, more than the past two decades combined. Of course, statistics in Burma are always to be treated with skepticism. These figures are for approved investments — which means that the investments have not actually been made yet, so they could still be scuttled by the unstable business climate, political shifts, or for other reasons.

Still, it is a very big number – on par with Southeast Asian nations like Vietnam that are much higher-profile investment destinations, and that are attractive to Western companies. Comparatively, Burma has been historically viewed as a pariah and most Western nations have some form of sanctions on investment in the country. Most of the new investments, as The Diplomat notes, are in resources such oil, gas, dams, and other extractive industries. So, one has to wonder whether the benefits of such investments will extend to the average Burmese men and women, given that previous investments in Burma’s resources made it easy for the government to siphon off the rewards, and led to horrific abuses including allegations of forced labor, wholesale dislocation of villages without compensation, and other crimes.

John Kao has a six-part series over at CNN GPS on China as an innovation nation. Just back from a study trip, Kao is a little breathless in his admiration of Chinese policymakers’ embrace of innovation. At least in my view, he doesn’t add very much to the debate about how innovative the country truly is. In fact, he seems pretty torn himself since he sees China’s ambitious planning and government intervention as great both a strength and a major pothole. The whole series is a kind of Rorschach test: those already skeptical will find further evidence of weakness in the Chinese system, those sure of China’s rise will find some new awe-inspiring stories.

As one of the skeptical voices, I began amassing new evidence of what I call the weakness in the software of innovation—the social, political, and cultural institutions and understandings that help move ideas from lab to marketplace. But I’ve begun to wonder how useful that is. Sure, there have been some good stories out the last two weeks which suggest that the process of building an innovation system will be slow and uneven—60 percent of state R&D funds are lost to corruption; the president of China Agricultural University accused of plagiarism; and an outspoken neuroscientist rejected from the Chinese Academy of Sciences—but this back and forth must be getting a little stale. Perhaps we can all agree that there are major weaknesses embedded in apparent strengths and that trends are clearer than outcomes.

China's Premier Wen Jiabao and Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF), attend the opening ceremony of the WEF Annual Meeting of the New Champions in northeastern China's port city of Dalian on September 14, 2011. (Jason Lee / Courtesy of Reuters)

Wen Jiabao is at it again. At the World Economic Forum’s (WEF) Annual Meeting of the New Champions in Dalian, the premier broke with party ranks and openly discussed the necessity of real political reform in China. He didn’t do this in the speech he delivered to open the forum but rather, apparently, in a closed-door discussion with WEF Chairman Klaus Schwab and a group of entrepreneurs.

Reading the transcript of his remarks, I knew something good was coming when the Premier prefaced his remarks on political reform by saying: “I feel a strong sense of responsibility to present my views on various issues in an accurate and candid manner. I have talked about political structural reform on many occasions in recent years, and these views, if put together, are fairly comprehensive.”

So what did he say? Some of it was the usual stuff about rectifying inequality, promoting transparency, and rooting out corruption. And then there was the stuff that gets your hopes up. Read more »

As the dialogue between Aung San Suu Kyi and the Burmese government continues, many Burmese observers see this as the most optimistic time in Burmese politics in two decades, since the National League for Democracy won the 1990 elections handily. Much could still go wrong, and of course the history of failed negotiations suggests that the Burmese government could still crush the dialogue with Suu Kyi, but the hope is there. In a new piece for the London Review of Books online, I analyze the potential for real political opening in Burma. Read it online here.

Flags fly in front of the United Nations Headquarters in New York. (Brendan McDermid/Courtesy Reuters)

On Monday, China, along with Russia, Tajikistan, and Uzbekistan, asked UN Secretary-General Ban Ki-moon to circulate their proposed International Code of Conduct for Information Security as a formal UN document at the 66th session of the General Assembly. The Global Times quotes foreign ministry spokeswoman Jiang Yu as saying that “China believes information and Internet security is a common challenge facing all countries, thus it can only be effectively coped with through international cooperation.”

U.S. policymakers will be pleased to hear Chinese officials framing Internet security as a global problem requiring international cooperation, but the rest of the proposed Code is bound to give them heartburn. The title alone, with its focus on information security, signals the problems to come in the document. Information security includes not only the protection of computer, communication, and other critical networks that is the primary focus of U.S. officials, but also the threats that the free flow of information can present to domestic stability in closed authoritarian states—hello Twitter and the Arab Spring. The document refers to the use of communication technologies that “are inconsistent with the objectives of maintaining international stability and security,” as well as the responsibility to “prevent other states from…undermin[ing] the right of the countries, which accepted this Code of Conduct, to independent control of ICTs.” This is going to be hard to square with the State Department’s support for the “Internet in a suitcase,” and other circumvention technologies designed to get around the Great Firewall.

Thailand's first female PM Yingluck Shinawatra receives the royal command appointing her as the country's new premier in front of a portrait of Thai King Bhumibol Adulyadej in Bangkok (Rungroj Yongrit/Courtesy Reuters).

Over the past five years Thailand’s Lèse-Majesté law, by far the strictest in the world, went from being scarcely used to being used an extraordinary number of times annually. According to a group of Thailand scholars, statistics from the Office of the Judiciary show a 1,500% increase in Lèse-Majesté cases in the past six years. In addition, Thailand has in recent years broadened the law in order to prosecute Thais who have allegedly insulted the monarchy on the Internet, in blogs, and using social media; one U.S. citizen recently was arrested in Thailand for just such a “crime.”

Lèse-Majesté, indeed, has become a political weapon — perhaps the most potent political weapon in Thailand — even though the king himself has said that he is not above criticism and seems to dislike the law. Royalists in the military, the bureaucracy, and the Democrat Party have used it to crush dissent. Striking back, the Puea Thai opposition and its allies have also in recent years used Lèse-Majesté against their political opponents. Whatever the original purpose for the law — which actually largely fell out of use in the 1940s, 1950s, and 1960s, a time when the monarchy was much weaker, that original purpose has vanished today. The rising use of Lèse-Majesté has grown concurrentlywith increases in censorship of all types, as well as self-censorship in the print and online media in Thailand.

Founder of WikiLeaks Julian Assange smiles as he arrives for his extradition hearing at Belmarsh Magistrates' Court in east London (Toby Melville/Courtesy Reuters).

The recent releases of new batches of Wikileaks cables, many of which reveal the names of protected sources for American diplomats, has roiled diplomatic relations nearly everywhere in the world, and certainly made potential informants more scared of talking to U.S. diplomats. But the cache of cables available about Southeast Asia is among the largest, if not the largest, of any embassy. And recent weeks have seen the release of cables with major news stories, including:

A cable interviewing Singaporean Straits Times editors and reporters who claim that the government applies significant pressure on them to take a rosy view of its policies. Some of the finest Straits Times’ reporters, frustrated by what they perceive as government pressure, try to remain in overseas bureaus, where they are much freer (and put out fine work) or simply leave the Straits Times entirely.

Chinese fighter jets take part in an international fleet review to celebrate the 60th anniversary of the founding of the People's Liberation Army Navy in Qingdao, Shandong province on April 23, 2009. (Guang Niu/Courtesy of Reuters)

Anyone who needs convincing that China’s military trajectory is cause for alarm should take a look at “Asian Alliances in the 21st Century,” a new report co-authored by several well-known Asia security experts, including Dan Blumenthal, Randall Schriver, Mark Stokes, L.C. Russell Hsiao and Michael Mazza. The report details the rapid modernization of China’s military capabilities and claims that Beijing is interested neither in benign hegemonic rule nor in helping Washington address global challenges. Rather, China’s leaders are ultimately concerned only with maintaining their power and expanding their maritime reach.

The thrust of the report has merit. China’s assertiveness in the East and South China Seas, as well as its increasingly unattractive foreign policy rhetoric, gives significant reason for concern and little reason for optimism about China’s real interest in strengthening regional security cooperation in the near term.

There are no shades of gray in the report, however, and the lack of nuance can be disconcerting. Oddly enough, it may even lead the authors to be a bit too optimistic. In the “what do we do about it” section, for example, the report calls for a far more deeply integrated U.S.-led alliance system in Asia. This proposal, however, raises a few additional issues that the report does not fully address. Read more »

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Asia Unbound examines political, economic, and social developments in Asia and the region’s growing importance in global affairs. Named one of the top fifty blogs following Asian business by Bschool.com.